(Figure: Long-Run Aggregate Supply Curves) Which of the following can explain the shift of the long-run aggregate supply curve from A to C in the figure?
What will be an ideal response?
negative supply shock
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If autonomous spending decreases, then
A) the expenditure multiplier means that equilibrium expenditure increases by a larger amount. B) the expenditure multiplier means that equilibrium expenditure increases by a smaller amount. C) equilibrium expenditure does not change. D) the expenditure multiplier means that equilibrium expenditure decreases by a larger amount. E) equilibrium expenditure decreases by the same amount.
According to the substitution effect along an indifference curve, when the relative price of a good falls, the consumer ________ substitutes ________ of that good for the other good
A) always; more B) always; less C) sometimes; more D) sometimes; less
A price floor that is set above the equilibrium price
A) causes suppliers to lower their prices. B) is binding. C) is non-binding. D) creates a shortage.
Exhibit 11-6Use the table below to answer the following question(s). Nominal GDP GDP Year(billions) deflator Year 1 600 100.0 Year 21,000 133.3 Refer to Exhibit 11-6. Measured in terms of Year 1 prices, real GDP in Year 2 was:
A. 600. B. 750. C. 900. D. 1,333.